ISLAMABAD: The tax-laden Budget 2024-25 has alarmed the business community. Experts warn that heavy taxation could undermine economic security and stifle growth, urging the government to address these concerns to avoid long-term damage, reports Media.
Talking to Media, Talha Jalal, senior research analyst at the Pakistan Business Council, elaborated that substantial tax increases aimed at increasing the revenue, came at a time when businesses, especially small and medium-sized enterprises (SMEs), were already struggling against high operational costs and economic uncertainties.
“The new tax regime does not provide adequate relief or incentives for the businesses to cope with these changes. Instead, it exacerbates financial pressures and could lead to reduced investments and potential layoffs,” he elaborated.
The business community has expressed strong dissatisfaction with the new tax measures. The official called for immediate dialogue with the policymakers to address the issues arising from the tax increases. There’s a need to work together to find solutions that support business sustainability and growth while still meeting the fiscal objectives, he added.
According to Bilal Ijaz Gilani, executive director at the Gallup Pakistan and chief architect of the Business Confidence Index, persistent political uncertainty combined with the tax-laden federal and provincial budgets had significantly impacted the business optimism in the country.
“Given these challenges, it is imperative to take immediate action to avert a potential crisis. The new government must prioritize implementing measures aimed at supporting the struggling businesses by including targeted interventions to alleviate the burden of high-interest rates, buttress the sectors facing acute distress, and stimulate economic activity,” he stressed.
Gathering responses from 454 small, medium, and large businesses during a recent survey conducted across more than 30 districts in the second quarter of 2024, the Gallup Pakistan survey revealed negative values across all three strands of its Business Confidence Index.
The index showed declines of 4-10% in scores for the current business situation, future business situation, and the country’s direction. Business owners appeared more pessimistic about the future, with 57% expressing negative expectations and only 43% expecting improvements. The net future business confidence score has declined by 36% since the last quarter, now standing at -14%. –INP
